Sunday, January 01, 2017

Greetings from Fabulous Mississauga!

The Bank of Canada announced on December 9th that it is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent.

This means that mortgage rates and bank prime rates should be steady for next month or so. Of course lenders can offer rate specials that you may be able to take advantage of.

Prime lending rate to consumers will likely stay at 2.70%

Some mortgage rates increased after the December announcement

The bank supported it's latest hold on rates by issuing the following statement, in part:

"Economic data suggest that global economic conditions have strengthened, as the Bank anticipated in its October Monetary Policy Report (MPR).

However, uncertainty, which has been undermining business confidence and dampening investment in Canada's major trading partners, remains undiminished.

Following the election in the United States, there has been a rapid back-up in global bond yields, partly reflecting market anticipation of fiscal expansion in a US economy that is near full capacity. Canadian yields have risen significantly in this context.

"

Inflation in Canada is on track to return to 2 per cent in 2017 as the complex adjustment underway in Canada's economy proceeds. The fundamentals remain in place for a pickup in growth over the projection horizon, albeit in a climate of heightened uncertainty.

The United States increased their prime rates a few days after this announcement. This is the first time in many years that the US interest rate is higher than here in Canada.